Helping smaller firms get funding

Sweeping reforms are on the way to make it easier for smaller firms and budding entrepreneurs to secure financing.

There are also initiatives to drive innovation in a number of areas, including strengthening Singapore's already leading role as a foreign exchange centre.

The reforms are a response to recommendations from the Committee on the Future Economy to help firms grow and develop new capabilities amid global competition and technological change.

The measures, which were announced yesterday by the Monetary Authority of Singapore (MAS), are to gear up the financial sector for the future, including "strengthening financing channels" for firms with strong growth potential.

MAS managing director Ravi Menon said in a statement yesterday: "The underlying thrust... is to provide a conducive environment for innovation - which is critical for the future of financial services.

"We do this through a judicious regulatory framework and enabling technology infrastructure. And even as we allow more risk-taking, we want to do so without compromising the safety of financial institutions and the stability of the financial system."

Several initiatives address the financing needs of firms and entrepreneurs, including what the MAS calls "next-generation Asian growth companies".

It will also tweak the regulations to enable finance companies to lend more to small businesses.

There are moves on the innovation front as well, with MAS and a local finance technology tech firm developing an electronic trade finance platform.

It is also promoting electronic trading platforms for foreign exchange to underpin Singapore's competitive edge as Asia's leading hub for currency trades.

MAS said it is also looking to simplify the authorisation process and regulatory framework for venture capital managers in the coming year to support start-ups.

"It shows that the MAS is listening to market feedback and is making Singapore a more progressive ecosystem for venture capital firms to operate in," said Mr Vinnie Lauria, founding partner of Golden Gate Ventures, which helped start-ups such as Carousell.

MAS may introduce dual-class share structures to support the growth of high-tech firms. It is also forming a new Data Analytics Group from March 15, to help it enhance the supervision of financial institutions.

wongsy@sph.com.sg

This article was first published on Feb 14, 2017.
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